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Facebook fan CPAs rising: report

Facebook is an increasingly important tool for marketers, many of whom are purchasing ads on Facebook to drive consumers to their Facebook Pages.

Qualitatively, Facebook’s importance is hard to deny, but plenty marketers have largely struggled to quantify the costs and ROI associated with their Facebook marketing efforts.

Web analytics provider Webtrends is, however, shedding some light on costs. It looked at more than 11,000 Facebook advertising campaigns which sought to drive users to ‘like‘ the advertiser’s Facebook Page and found that achieving the desired is costing marketers $1.07 per conversion. It also discovered that costs are rising. In 2009, these ads had an average CPM of 17 cents. Last year, that rose to 25 cents. At the same time, click-throughs decreased, going from .063% in 2009 to .051% in 2010.

For marketers purchasing display inventory and search ads off of Facebook, such numbers probably look downright cheap, despite the rising costs. But does that mean that Facebook advertising is a great bargain? No.

Webtrends Justin Kistner told the Wall Street Journal that the value of the Facebook fans these ads is designed to acquire “depends on the kinds of campaigns you are driving at that fan base.” A Facebook spokesman echoed a similar sentiment, telling the Journal, “On Facebook, the magic of marketing happens when brands activate their fans in ways that inspire people to share those messages with their friends.“

In theory this all sounds good. But marketers have an uphill battle in getting their Facebook fans to take meaningful action. At the very least, it requires time and a strategic, dedicated effort. Neither is free. In some markets, such as online retail, social media offers great promise but currently seems to be playing a minor role in driving traffic (and therefore logically sales), as evidenced by the fact that one new study shows social media only drives 3% of traffic to e-commerce sites. In this market, Facebook-based retail, or F-commerce, may be the answer, but that too requires investment.

None of this, of course, means that marketers shouldn’t make investments in Facebook. But they should remember that getting consumers to do business with you through world’s largest social network involves extra steps and there are few shortcuts. The marketers who succeed on Facebook will be those who recognize that just because completing one step is relatively inexpensive, it’s the entire process that counts.

Startups and established companies alike measure success using a variety of metrics. One of the most popular, of course, is market share. And for good reason: if you control a large chunk of a particular market, it would seem that you’re doing something right. And there’s the fact that impressive-sounding market share figures make for great PR fluff.

But is market share all that it’s cracked up to be?According to an interesting analysis of the mobile phone market conducted by Asymco, the answer might just be ‘no.‘

Econsultancy’s Marketing Budgets 2011 Report tells a familiar story of increasing digital marketing budgets, but a much more nuanced picture is emerging beyond the usual mantra that digital budgets are increasing at the expense of ‘traditional’ marketing.

The findings also challenge the orthodox view that digital is perceived as more measurable than offline.

According to a newly-published study published by Pew, nearly three-quarters of Facebook users polled said they didn’t know that Facebook generates and stores data about their interests and traits, and, when they came to learn this, over half indicated that they were uncomfortable with Facebook’s practice.

Mastercard, the third-largest credit card processor in the US, has announced a new policy that will make it more difficult for some businesses to automatically convert free trials into recurring subscriptions.